Budget Review Begins, Clash Over Local Education Grant Reform... 35% vs. 10% Weight for School-Age Population Change

On Nov. 4, Education Superintendents' Council Proposes "Tax-Linkage System, 10% School-Age Population Weight, and 5% Buffer Mechanism"

As deliberations on next year's budget proposal began on November 4, the conflict between the government and the education community over reforming local education finance grants has emerged as a key issue.

The Korea National Council of Superintendents of Education, an association of education superintendents from 16 cities and provinces nationwide, held a press conference at the National Assembly that morning and proposed its own reform plan in opposition to the government's proposal.

Yonhap News Agency

The government plans to abolish the current system linking grants to 20.79% of domestic taxes and reform the calculation method so that the grant growth rate is determined by reflecting 35% of the change in the school-age population in the nominal growth rate.

In response, the council proposed retaining the current system linking grants to domestic taxes while introducing a "5% buffer mechanism." Under the proposal, if the grant growth or reduction rate exceeds 5% year on year, two-thirds of any increase above that threshold would be contributed to a national fund, while the government would make up for part of any decrease. The council also called for lowering the weight assigned to changes in the school-age population under the government's new formula from 35% to 10%.

According to the council's estimates, next year's grants would total 89.6 trillion won, 10.8 trillion won more than the 78.8 trillion won under the government's proposal. City and provincial education offices say they need at least 88.4 trillion won.

A council official said, "Just 8.8% of total grants is spent directly on students for curricula and educational activities." The official added, "Essential expenses such as labor costs, school operating costs, and meal costs account for about 90% of the total, and it would be difficult to cover necessary expenses if the decline in the number of students were reflected at a rate as high as 35%."

By contrast, the Ministry of Education based its calculation on the 40% of grants that remains after excluding labor costs, which account for 60%. A ministry official said, "We initially planned to reflect the 40% excluding labor costs, but lowered the rate to 35% after also considering the possibility that labor costs could rise further in the future." The official added, "Most education spending is directly or indirectly connected to students, so it is difficult to objectively define the scope of costs incurred for students."

In a separate explanatory document, the ministry projected that grants would not decrease from the previous year after the reform and that their average annual growth rate from 2026 to 2030 would reach 6.6%.

"2021-2030 Grant Trends and Forecast" data. Ministry of Education.

The ministry said the plan would enable a stable response to inflexible expenses such as labor costs and promote balanced growth in the education sector, as the school-age population is expected to decline by 1.92 million over the next 10 years, from 5.91 million in 2025 to 3.99 million in 2034.

At the press conference that day, however, the council argued that the government's reform plan did not sufficiently account for essential financial needs in the education sector. It also stressed that the reform of the grant system should not be rushed by designating it as a bill related to the revenue budget proposal.

The council said, "The 16 city and provincial education offices nationwide expect a total funding shortfall of 7.3657 trillion won as they prepare their main budgets for next year," and urged the government to "accept the council's plan for shared prosperity in education finance."

This content was produced with the assistance of AI translation services.